For years we have heard that in terms of flexibility, the online shop can hardly be beaten and for many reasons there is no alternative. But now an increasing share of the trading volume worldwide comes from platforms such as eBay, Amazon Marketplace and Co. In fact, there are not only situations in the beginning of the business in which your own web shop is only the second-best alternative. Platforms simply bring additional trading volume and reach.
But what role should retailer portals like eBay or Amazon play?
It is clear, on the one hand, that dealers only have full sovereignty over their business in their own web shop. In the past, they have repeatedly had to recognize that for some reason Amazon has blocked them (often involving allegations of selling inferior or fake goods or having messed up at the service level). Therefore, the only good advice is not to rely too much on platforms - such as the Amazon Marketplace, eBay or Rakuten etc., and make smart use of the additional trading options. Because the platform sets the rules and can change them largely independently - and at worst overnight. Higher fees, a change in the order and presentation of dealer offers or a change in the presentation of recommended products - all of this can quickly lead to dealers generating significantly less revenue than before.
On the other hand, such a marketplace presence is especially pleasant in the early days of business operations, in order to gain experience and not have to bear the same high initial investments that a dedicated online shop naturally brings with it. Fees and sales commissions remain plannable and manageable and sometimes only apply to successful sales. Also, you do not have to worry about the technology and the creation of product descriptions as a platform dealer. If necessary, make sure that you publish your offers in accordance with the rules.
Over time, merchants should consider developing their business on as many legs as possible - and not to be too dependent on any partner. The own shop remains crucial because of the possible branding: the fact is that a customer who comes through a trading platform usually doesn’t care about which dealer he buys from and he will rarely come back if another dealer is only slightly cheaper and has a similarly good rating.
And even worse: many less experienced customers, even with the branding-strong Amazon, are still barely aware that they are buying their product from a third party. However, you cannot afford weaknesses in service or objections when processing a replacement request - both Amazon and eBay support the customer rather than the dealer - in almost all cases.
Platforms are suitable for testing new markets and products
A shop is especially in the early days an unpredictable high cost risk. But to calculate the costs and the margin resulting from the sale isn’t easy at all, hence, selling through a platform is always a marketing investment. So, you pay commissions and fees, but in return you also get a reputation via a platform and customers who may discover you on Amazon Marketplace or eBay and then land on your web shop. If you rely purely on your web shop, you need even more an extensive marketing strategy: you must book advertising on online and social channels or otherwise provide for awareness.
And in other ways, using a marketplace can be rewarding for you: when the potential is to be tested in a new country market, or when you want to experiment with new product groups or products that may not fit with your existing portfolio. In order not to be considered as a "junk shop" for all sorts of things and possibly damage your laboriously constructed dealer brand, you should first test such sales on eBay or Amazon.
The best of both worlds is the solution
Both your own web shop and the use of trading platforms are justified. Online retailers should understand marketplaces like eBay and the Amazon Marketplace as an extension of their territory and generate additional revenue from it, besides using them as their playground for experimenting with new markets and target groups. But it should also be clear that your own web shop is comparable to your own property where only you determine the rules and conditions.